An interesting news story hit the press a couple of weeks ago when pharmacy giant CVS stated that the company will discontinue the sale of tobacco products. Immediate speculations about the company's bottom line were thrown around, and some are wondering if this move will cause CVS customers that smoke or use tobacco to stop shopping at the store altogether. While CVS will lose an estimated $1.5 billion in annual tobacco sales, this company may have just gained the respect and consumership of other customers due to their move to become a leader in retail health care products as well as pharmacy services.
The decision to make a drastic change in company operations is always a tough one. Who will like the change? Will there be more supporters than those who oppose? Will this cause the company to lose enough money to fall behind its competitors? These are some questions that may have been asked during the process of making the decision to end tobacco sales in CVS stores, and there are many foreseeable pros and cons to the situation.
Some customers will appreciate the change while others will not. Consumers who feel tobacco products harm anyone that comes into contact with them will likely be impressed and may even go out of their way to shop at the store more. However, those who use tobacco products may resort to never shopping at a CVS for non-tobacco items, even if it is convenient. On both sides, there are consumers whose lives are not affected by tobacco products but will still have opinions that inform their decisions of whether or not to shop at CVS.
In an interview with CVS President and CEO Larry Merlo, consumer health seemed to be the major concern of the company. Merlo said in the interview, "I think everybody came to the right decision. It's a real contradiction to talk about all the things we're doing with people to help them on their path to better health and at the same time sell tobacco products." While some consumers still want to be able to buy tobacco products, Merlo also addresses the fact that many cigarette smokers have the goal of quitting, and this decision will help them on that path. Click the photo to watch the full interview with CBS News.
CVS certainly seems to have their consumers' health and best interests at heart, but this decision could actually bring them more business and strengthen profits in the future. While the chain will take an initial cut of $1.5billion from tobacco sales and another $500 million from products purchased with tobacco transactions, this decision could also bring more future revenue from other health-related programs. The company's long-term success as a pharmacy and health care provider is likely to be boosted by the discontinuation of tobacco sales. CVS can now direct attention and marketing efforts previously used for tobacco products toward an area more in line with helping consumers manage their health.
Bold moves are essential to growth, which is made obvious by innovative companies such as Apple and Starbucks, who are constantly adapting to their consumers. It is not yet certain whether this decision could hinder CVS's growth as a company, but it is likely that this could open many doors for them as they lead the way in retail health products. It is also refreshing to learn about companies whose concern for consumers and their best interest trumps a few years of lowered sales revenues.
Readers: How do you feel about this decision? Do you shop at CVS?